Rare opportunity to acquire super-regional retail asset in Queensland's most affluent trade area.
Indooroopilly Shopping Centre (Indooroopilly), located seven kilometres south west of the Brisbane CBD, is being offered for sale with management rights, via a domestic and international campaign to be conducted through JLL and Colliers International.
Indooroopilly is the pre-eminent super-regional shopping centre servicing the inner western and southwestern suburbs of Brisbane and represents one of only four super-regional centres in Brisbane. Located in an extensive trade area comprising close to 650,000 people, Indooroopilly is a major retail destination attracting an estimated 12 million customer visits a year.
The shopping centre is a consistently strong performer and enjoys an affluent trade area, underpinned by attractive demographic characteristics. The average per capita income in the main trade area is 30% above the Brisbane metropolitan average and the population growth in the past 5 years has been 2.3% per annum, significantly higher than the Australian average of 1.7%. More broadly, quarterly economic trend data for Queensland1 indicates that the state is experiencing solid annual economic growth of 3.5%.
JLL’s Head of Retail Investments – Australasia, Simon Rooney said, “We anticipate and have already fielded considerable domestic and offshore investor interest in Indooroopilly. It represents the first super-regional shopping centre investment opportunity to be offered on-market since 2010 and with management rights in over a decade.”
Colliers International’s Head of Retail Investment Services – Australia, Lachlan MacGillivray said, “The opportunity to own a true super-regional centre represents the ultimate prize in the Australian retail market. Super-regionals have delivered the highest risk-adjusted total return, not just within retail, but of any commercial property sub-sector over the last 15-years, which is why they are so competitively pursued when opportunities arise”.
Originally built in 1971, Indooroopilly was expanded in 1987, 1998 and most recently in 2014 to approximately 116,000 sqm of total lettable area. The shopping centre is anchored by two Department Stores, Myer and David Jones; two Discount Department stores, Kmart and Target; two supermarkets, Coles and Woolworths; a 16 screen cinema; 14 mini majors; more than 300 specialty shops; and at grade and covered parking for close to 4,600 cars. The recent $450 million redevelopment, completed in 2014, resulted in a 30% increase in centre turnover and included the addition of the first Uniqlo and the first H&M stores in Queensland.
The total site area is approximately 7.8 hectares and includes surrounding, highly strategic land holdings, offering further development potential. The area is identified as a Principal Regional Activity Centre, permitting mixed use redevelopment on the ancillary land.
Mr MacGillivray said that “While the recent redevelopment positioned Indooroopilly for continued long-term outperformance, the centre’s dominant market position in Brisbane together with several new initiatives currently earmarked for the centre, offer potential purchasers further financial upside via enhanced sales performance and footfall visitation.”
Noting the scarcity factor attached to super-regional centres like Indooroopilly, Mr MacGillivray added, “We are very pleased to be offering Indooroopilly into a market where the leading super-regional centres in Australia are controlled by a small number of owners. Both domestic and offshore capital has been actively seeking exposure to the rarely traded regional shopping centre sector for many years, with little opportunity until now” said Mr MacGillivray.
Mr Rooney said, “Offshore interest in Australian retail assets continues to grow, particularly given the attractiveness of Australia’s market, economic and regulatory fundamentals. Offshore purchasers accounted for 28% of retail transactions in 2015 and 32% in 2016 – the highest proportion since 2007. Australia still offers strong relative value in a global context, particularly for dominant retail assets like Indooroopilly.”
JLL and Colliers will be seeking expressions of interest by 12 noon Australian Eastern Daylight Savings Time on Thursday 12 October, 2017.
 CommSec State of the States, State and territory economic performance report April 2017